Global Oil Tools, Inc. v. Expeditors International of Washington, Inc. et al

REPLY to Response to Motion

E.D. La.Mar 28, 2019

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA GLOBAL OIL TOOLS, INC. Plaintiff VS EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND ZURICH AMERICAN INSURANCE COMPANY Defendants CIVIL ACTION NO. 16-cv-16372 SECTION “M” Honorable Barry W. Ashe MAGISTRATE (1) Honorable Janis van Meerveld REPLY MEMORANDUM IN SUPPORT OF ALTERNATIVE MOTION TO DISMISS CLAIMS OF GLOBAL OIL TOOLS, INC. MAY IT PLEASE THE COURT: This reply memorandum is submitted on behalf of Defendants Expeditors International of Washington, Inc. and Zurich American Insurance Company (collectively “Expeditors”), in support of their Alternative Motion to Dismiss Claims of Global Oil Tools, Inc., and specifically to reply to arguments advanced by Global Oil Tools, Inc. in its opposition memorandum (R.Doc. 203). As the Court is aware, Hapag-Lloyd (America), LLC (“Hapag”) filed a motion to dismiss the crossclaims of Expeditors International of Washington, Inc. and Andrea Merzario, S.A. (“Merzario”) on the grounds that a forum selection clause in its bill of lading (Sea Waybill) required that claims against Hapag must be pursued in the courts of Germany (R.Doc. 171). Expeditors opposed Hapag’s motion on the grounds that Hapag waived the right to enforce the forum selection clause, and therefore, the motion to dismiss the crossclaims should be denied. See R.Doc. 184. In the alternative, Expeditors averred in its opposition to Hapag’s motion that if the Case 2:16-cv-16372-BWA-JVM Document 204 Filed 03/28/19 Page 1 of 7 -2- Court was inclined to enforce Hapag’s forum selection clause and grant Hapag’s motion to dismiss the crossclaims, contrary to Expeditors’ evidence of waiver, then the Court should also enforce a similar forum selection clause in Expeditors’ bill of lading, which requires claims against Expeditors be brought in Washington state or federal courts. See R.Doc. 184, at p.9. For the sake of good order, and to insure compliance with the Court’s rules of procedure, Expeditors and Zurich filed this motion setting forth the same evidence and arguments in support of dismissal of Global’s claims, that Expeditors presented in its opposition to the Hapag motion to dismiss. For further emphasis, this motion was plead solely in the alternative, in the event the Court rejects Expeditors’ evidence that Hapag waived its right to enforce the forum selection clause in its Sea Waybill. 1. Global’s opposition to Expeditors’ motion for alternative relief relies exclusively on the position that Hapag and Expeditors waived their right to enforce the forum selection clauses in their respective bills of lading Global’s defense to Expeditors’ motion for alternative relief is that neither Hapag nor Expeditors should prevail on their motions to dismiss because they waived their right to invoke the benefit of the forum selection clauses in their respective bills of lading. They did so, argues Global, because they waited too long to assert their right under the clauses, and ultimately asserted those rights to dismissal only after substantially invoking the judicial process in this Court. R.Doc. 203, pps. 1-7 and 9-12. This argument is precisely the one advanced by Expeditors in their defense of Hapag’s motion to dismiss the Expeditors and Merzario crossclaims. R.Doc. 184, pps. 4-7. The waiver argument advanced by Expeditors in opposition to the Hapag motion to dismiss the crossclaims, and the waiver argument advanced by Global in opposition to Hapag’s motion to dismiss the crossclaims and Expeditors’ motion for alternative relief are precisely the same and cannot be distinguished in any material way. Hapag was brought into the case only four months Case 2:16-cv-16372-BWA-JVM Document 204 Filed 03/28/19 Page 2 of 7 -3- after Global filed its original complaint. R.Docs. 001 and 016. Therefore, for all intent and purposes, Hapag and Expeditors have been defending the Global claims for virtually the same period of time. Hapag and Expeditors sought dismissal of the claims against them at about the same time. Hapag filed its motion to dismiss on the last motion filing date, January 30, 2019 (R.Doc. 171), and Expeditors plead its claim for dismissal of the Global complaint on February 13, 2019.1 Therefore, Hapag and Expeditors have been involved in the case about the same amount of time, and both filed their respective motions to dismiss based on the forum selection clauses, at about the same time. The only distinction between Hapag and Expeditors vis-à-vis the timing of seeking dismissal of claims pursuant to the forum selection clauses, is that Expeditors relied on the failure of Hapag to file a venue motion until the last motion filing date. This reliance was significant because the facts indicate that Expeditors passed on to Hapag, Global’s request to delay the shipment to the next vessel, but that Hapag failed to pass the request on to its stevedore. It was this failure that resulted in the containers being shipped early. See R.Doc. 112-7, pps. 13-18. In ruling on Hapag’s earlier motion for summary judgment seeking a dismissal of Global’s direct claim against it, Judge Vance found that Expeditors had relayed Global’s request to roll the shipment to the next Hapag vessel, but that Hapag failed to give that instruction to its stevedore. R.Doc. 113, p.2. In these circumstances, and considering that Hapag is the party responsible for the losses, if any, it was reasonable for Expeditors to rely on Hapag’s presence in this case, where 1 Expeditors plead its motion to dismiss Global’s claims in the form of alternative relief in its opposition to Hapag’s motion, to be considered by the Court only in the event it was inclined to deny the waiver argument, and grant Hapag’s motion to dismiss the crossclaims. R.Doc. 184. Expeditors subsequently filed its request for alternative relief, to dismiss Global’s claims, in a separate, stand-alone motion. R.Doc. 195. Case 2:16-cv-16372-BWA-JVM Document 204 Filed 03/28/19 Page 3 of 7 -4- all issues and responsibilities could be resolved in one proceeding, and thereby wait until after Hapag filed its motion to dismiss the crossclaims before filing its own motion for alternative relief of dismissing Global’s claims. This distinction establishes that Expeditors’ delay in filing its motion for alternative relief was reasonable in the circumstances. With respect to Global’s argument that Hapag and Expeditors substantially invoked the judicial process, there can be no meaningful distinction between the processes invoked by each of those parties. All have engaged in the discovery process and all have filed substantive motions. One distinction is that Hapag has actually obtained the benefit of its activity in the case by obtaining a summary dismissal of Global’s claims against it (R.Doc. 113), whereas Expeditors’ motions have not yet been decided. Because no meaningful distinctions can be made between Hapag and Expeditors with respect to the factors to be considered in deciding whether those parties waived their right to invoke the forum selection clauses, Hapag’s motion to dismiss and Expeditors’ motion for alternative relief, should be decided consistently and in the same way, such that all claims and crossclaims are decided in the same forum. 2. Global admitted an agency relationship with Expeditors, and therefore, Global is bound by the Hapag bill of lading terms In its motion for alternative relief Expeditors avers that Global is bound by the forum selection clause in the Hapag bill of lading because Expeditors, as a NVOCC (non-vessel operating common carrier), was Global’s agent for the purposes of booking the ocean transit with Hapag. In its First and Second Amended Complaints, Global alleges causes of action against Expeditors for breach of its duties as Global’s agent. First Amended Complaint, R.Doc. 016, at pps. 13-14, and Case 2:16-cv-16372-BWA-JVM Document 204 Filed 03/28/19 Page 4 of 7 -5- Second Amended Complaint, R.Doc. 158, at p.13. Global does not refute Expeditors’ agency status in its opposition to the motion for alternative relief. In its motion for alternative relief, Expeditors presented supporting caselaw holding that when a NVOCC like Expeditors, enters into a freight booking with a vessel operating common carrier like Hapag, the NVOCC is acting as the agent of the cargo owner, in this case Global, as the principal. As such, the principal is bound by the vessel operating carrier’s bill of lading, including any forum selection clause it may contain. Global does not refute the legal precedents relied on by Expeditors for its agency status. In sum, Global does not dispute that Expeditors was Global’s agent for purposes of booking the ocean transit of the tools. Instead it argues that Expeditors exceeded its authority as agent by virtue of Hapag’s erroneous early shipment of the tools. The evidence presented to Judge Vance, and Judge Vance’s earlier finding of fact on that evidence, establishes that Expeditors relayed to Hapag, Global’s request to delay the shipment to the next vessel, but that Hapag failed to follow the new instruction to delay the shipment. See Hapag’s Booking Notifications (R.Doc. 112-7, pps. 13-18) showing that Expeditors relayed Global’s request to roll the shipment to the next Hapag vessel, and Judge Vance’s Order finding that Expeditors relayed the request to roll but that Hapag failed to implement it (R.Doc. 113, p. 2). This evidence and Judge Vance’s prior Order show that at all times Expeditors acted within the instruction given to it by Global, and therefore, Global is bound by the terms of the Hapag bill of lading, including its forum selection clause. 3. Hapag argues that Expeditors will not be prejudiced by the granting of its motion to dismiss Hapag also filed an opposition to Expeditors’ motion for alternative relief, in which it argues that as a result of the recent continuance of the trial date and pre-trial deadlines, Expeditors Case 2:16-cv-16372-BWA-JVM Document 204 Filed 03/28/19 Page 5 of 7 -6- has not been, and will not be, prejudiced by a granting of the Hapag motion to dismiss the crossclaims. See R.Doc. 200. Hapag’s position ignores the substantial expense that has already been incurred by Expeditors litigating issues of Hapag’s fault, including a finding by Judge Vance that it was Hapag that was responsible for the premature shipment of the tools, the prejudice of having to start proceedings anew in another forum, and the potential for inconsistent judicial decisions if the Court were to grant Hapag’s motion to dismiss without also dismissing Global’s main demand against Expeditors. Expeditors would also respectfully direct the Court to their memorandum in opposition to Hapag’s motion to dismiss the crossclaims, for the other aspects of prejudice unrelated to the ability to adequately prepare for trial. See Expeditors’ opposition to Hapag’s motion to dismiss, R.Doc 184. 4. Conclusion If the Court is inclined to grant Hapag’s motion to dismiss the crossclaims, which Expeditors urges it not do, then Expeditors asserts that all the issues should be resolved in one forum. For this reason, Expeditors avers that pursuant to Global’s irrevocable consent to any venue in which Expeditors is a party to a legal action that arises from a claim related to the carriage of its cargo, Global’s claims should be treated the same as Expeditors’ crossclaim. Therefore, if the Court rejects Expeditors’ positions regarding Hapag’s waiver of its forum selection defense, or the unreasonableness or unjustness of granting Hapag’s motion, and instead accepts the arguments advanced by Hapag in its motion to dismiss, then the same rational and dismissal should apply to Case 2:16-cv-16372-BWA-JVM Document 204 Filed 03/28/19 Page 6 of 7 -7- Global’s claim pursuant to the forum selection clause in the Expeditors’ bill of lading, and Global’s claims should be dismissed. Respectfully submitted, /s/ John F. Fay, Jr. John F. Fay, Jr. (La. Bar #1870), T.A. jfay@faynelsonfay.com FAY, NELSON & FAY, LLC Energy Centre 1100 Poydras St., Suite 2900 New Orleans, Louisiana 70163 Tel: (504) 799-2252 Fax: (504) 383-8920 Attorneys for EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. and ZURICH AMERICAN INSURANCE COMPANY CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 28th day of March, 2019, I electronically filed the foregoing pleading with the Clerk of Court utilizing the Court’s CM/ECF system, which will send a notice of electronic filing to those counsels of record who are identified to receive e-mail notices of filing in this case, who have enrolled in this Court's CM/ECF program, or who otherwise consented to receive notice and service via CM/ECF. I further certify that I mailed the foregoing document and the notice of electronic filing by first-class mail to all non-CM/ECF participants. /s/ John F. Fay, Jr. Case 2:16-cv-16372-BWA-JVM Document 204 Filed 03/28/19 Page 7 of 7